The bill on large-scale tax cuts worth $4.5 trillion, proposed by President Donald Trump, passed a key vote in the Senate — 51 votes in favor and 49 against. This brings the administration closer to approving one of the most ambitious economic initiatives of Trump's second term. A crucial role in the negotiations was played by Vice President J. D. Vance, who managed to reach a compromise among Republicans. Senator Ron Johnson changed his position after introducing an amendment providing for a gradual reduction in Medicaid funding. Two other representatives of the Republican Party voted against.
Despite the total amount of tax breaks of $4.5 trillion, in the official fiscal documentation, Republicans take into account only $693 billion, using budget methods that exclude the extension of previous incentives from calculations.
Key provisions of the bill include:
- indefinite extension of tax breaks in 2017;
- elimination of subsidies and tax incentives for green energy, including solar, wind and electric vehicles, starting in 2027;
- creation of a $25 billion rural health care facility support fund;
- increase of the SALT deduction limit (state and local taxes) to $40 thousand for a period of five years;
- temporary tax breaks for tipped employees who receive overtime pay, as well as retirees;
- increase the government debt ceiling by $5 trillion to prevent a technical default.
The final vote in the Senate is expected on Sunday. If approved, the document can be submitted to the House of Representatives by July 3. The passage of the bill will mark a turning point in the fiscal policy of Trump's second term, reflecting the administration's priorities for tax reform and macroeconomic stability.
